The IT sector is sick, but its last hope could rest in a new course of tablets. This year alone, Nasdaq stocks have lost a third of their value, and the S&P 500’s list of the year’s biggest losers is a roll call of its former technology darlings. Slightly better recent results cannot disguise the truth: the industry desperately needs a cash cow.Step forward the TabletPC, a new type of computer billed grandly as the “next stage in the evolution of the PC”. Many of the industry’s finest – including Intel, HP, Toshiba and Acer – have got behind the project, but Microsoft is the name that stands out. With his prized Xbox looking more and more shaky, Bill Gates wants to prove he is still at the cutting edge.The claim being made by the TabletPC’s inventors is nothing short of the death of the keyboard.

The machine will feature a plasma screen roughly the size of an A4 sheet of paper and will allow people to input, edit, send and receive data using an electronic pen or their own voice.”We’d expect that people who are buying laptop computers today to be TabletPC buyers of tomorrow. I can imagine a time, perhaps in three years, when the laptop looks very old-fashioned,” says Neil Holloway, Microsoft’s UK managing director.Microsoft is not the only one with a lot riding on the project. The largest hardware element of the TabletPC comes from HP, the computer giant formed out of the recent merger of Hewlett-Packard and its old rival Compaq.The merger process was by no means simple, and was largely pushed through with firm promises of “complementary technologies”. The TabletPC represents the first product of the merged group, and HP needs to prove that the company is greater than the sum of its parts. It certainly has high hopes for the machine, and trots out the same party line that it has the potential to replace the laptop entirely. In HP’s case, that statement takes a lot of guts, since Compaq made its fortune as the leader in laptop and palm-top computing.Anticipation of the TabletPC has been the hottest topic on the internet message boards for more than a year. The idea of seamlessly converting written notes to text, and combining that with a high-powered PC, has whetted a lot of appetites.

But there remain large pockets of doubt.Much of that centres on the absentees from the project, of which IBM is the most notable. Mr Holloway brushes aside that concern: “To be honest, that’s their choice Some companies may decide to join at a later stage. But it’s only a matter of time before others join.”Sources close to IBM, however, paint a different picture, and there are many analysts who believe that people should hold off from criticising Big Blue just yet. IBM is a massive investor in its own research and development projects, and has been quietly developing the MetaPad, a hugely powerful device of which little is known.